Lecture 6

<p>2%</p> Signup and view all the answers

<p>Interest rates</p> Signup and view all the answers

<p>Daily confidential statistical information relating to money market transactions</p> Signup and view all the answers

<p>Domestic interest rate = Foreign interest rate + expected exchange rate appreciation of domestic currency</p> Signup and view all the answers

<p>Interest rates used by banks for operations among themselves</p> Signup and view all the answers

<p>A specific consumer price index developed by the EU</p> Signup and view all the answers

<p>The increase in the general level of prices of goods and services in an economy</p> Signup and view all the answers

<p>Being a member of the ERM for a minimum of two years without any tensions</p> Signup and view all the answers

<p>All EU countries except Denmark</p> Signup and view all the answers

<p>A transfer system in the EU to deal with the debt crisis</p> Signup and view all the answers

<p>To stabilize exchange rates between EU countries</p> Signup and view all the answers

<p>3.7%</p> Signup and view all the answers

<p>An event that has different economic effects on different parts of a given region.</p> Signup and view all the answers

<p>Labour mobility, product diversification, openness.</p> Signup and view all the answers

<p>It becomes more costly.</p> Signup and view all the answers

<p>Managed floating</p> Signup and view all the answers

<p>They become cheaper</p> Signup and view all the answers

<p>They increase</p> Signup and view all the answers

<p>Lower interest rates lead to higher exchange rates</p> Signup and view all the answers

<p>If the rate €/$ decreases, the € is depreciating against the $.</p> Signup and view all the answers

<p>There is a loss of competitiveness and, consequently, prices (or costs, such as wages) will fall to restore competitiveness.</p> Signup and view all the answers

<p>When the returns on domestic and foreign assets are equalized</p> Signup and view all the answers

<p>Interest rate on main refinancing operations, rate on deposit facility, and rate on marginal lending facility</p> Signup and view all the answers

<p>Below, but close to, 2%</p> Signup and view all the answers

<p>Offering central bank loans, purchasing financial assets, providing forward guidance</p> Signup and view all the answers

<p>Inflation in the EU peaked in 2008 and subsequently decreased.</p> Signup and view all the answers

<p>Increased marginal costs due to the area becoming more costly.</p> Signup and view all the answers

<p>Sweden</p> Signup and view all the answers

<p>Having a stable exchange rate for a minimum of two years</p> Signup and view all the answers

<p>To provide fiscal transfers to EU member countries in need during times of crisis</p> Signup and view all the answers

<p>In a fixed exchange rate, authorities declare an official parity vis-à-vis another currency or a basket of currencies, while in a managed floating exchange rate, central banks buy their own currency when they consider it too weak, and sell it when they see it as too strong, but they refrain from pursuing any particular exchange rate target.</p> Signup and view all the answers

<p>It increases the cost of production because some of the inputs needed to produce the good will come from abroad and will be more expensive when the domestic currency depreciates.</p> Signup and view all the answers

<p>The relationship between interest rates and exchange rates.</p> Signup and view all the answers

<p>It may increase the likelihood of asymmetric shocks and make it more difficult to pursue a common monetary policy.</p> Signup and view all the answers

<p>A regime where the exchange rate is allowed to fluctuate based on market forces without intervention from the central bank.</p> Signup and view all the answers

<p>There is a loss of competitiveness.</p> Signup and view all the answers

<p>They can lead to different economic effects on different parts of a region</p> Signup and view all the answers

<p>Lower than the main refinancing operations rate</p> Signup and view all the answers

<p>The wholesale euro unsecured overnight borrowing costs of banks located in the euro area</p> Signup and view all the answers

<p>Inflation decreases the purchasing power of consumers</p> Signup and view all the answers

<p>Interest rates used by banks for operations among themselves</p> Signup and view all the answers

<p>The ERM is a European currency exchange mechanism that requires countries to maintain a stable exchange rate for at least two years to qualify for euro adoption.</p> Signup and view all the answers

<p>The exchange rate stability criterion requires countries to maintain a stable exchange rate for at least two years without the presence of 'severe tensions' for the currency exchange rate.</p> Signup and view all the answers

<p>A fixed exchange rate is when authorities declare an official parity vis-à-vis another currency or a basket of currencies, with margins of fluctuations around the central parity, while a managed floating exchange rate is when central banks buy their own currency when they consider it too weak, and sell it when they see it as too strong.</p> Signup and view all the answers